Correlation Between TRON and NuShares ETF

Can any of the company-specific risk be diversified away by investing in both TRON and NuShares ETF at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TRON and NuShares ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRON and NuShares ETF Trust, you can compare the effects of market volatilities on TRON and NuShares ETF and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TRON with a short position of NuShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRON and NuShares ETF.

Diversification Opportunities for TRON and NuShares ETF

-0.11

Correlation Coefficient

TRON  NuShares ETF

Good diversification

The 3 months correlation between TRON and NuShares is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TRON and NuShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuShares ETF Trust and TRON is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TRON are associated (or correlated) with NuShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuShares ETF Trust has no effect on the direction of TRON i.e., TRON and NuShares ETF go up and down completely randomly.

Pair Corralation between TRON and NuShares ETF

Assuming the 90 days trading horizon TRON is expected to generate 9.37 times more return on investment than NuShares ETF. However, TRON is 9.37 times more volatile than NuShares ETF Trust. It trades about 0.08 of its potential returns per unit of risk. NuShares ETF Trust is currently generating about 0.05 per unit of risk. If you would invest  6.57  in TRON on October 27, 2024 and sell it today you would earn a total of  18.43  from holding TRON or generate 280.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.32%
Values	Daily Returns

TRON  vs.  NuShares ETF Trust

TRON

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

NuShares ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuShares ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, NuShares ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TRON and NuShares ETF

The main advantage of trading using opposite TRON and NuShares ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON position performs unexpectedly, NuShares ETF can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NuShares ETF will offset losses from the drop in NuShares ETF's long position.

The idea behind TRON and NuShares ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.